Business Confidential: Lessons for Corporate Success from Inside the CIA

By Peter Earnest and Maryann Karinch

A critical figure in America’s Cold War intelligence operations, Peter Earnest knows the surprising similarities between what the Central Intelligence Agency does to coordinate operations and protect the country and what any smart organization can do to protect its bottom line. Now, in this unprecedented book, he’s partnering with bestselling author Maryann Karinch to demonstrate what you and your organization can learn from how the CIA does business. Filled with fascinating and instructive examples from CIA operations and the business world, Business Confidential offers insights into the Agency’s extraordinary screening, testing, and training practices; methods for supporting employee retention; creative and agile problem-solving strategies; and methods for establishing mission-focused outcomes. You’ll learn skills like how to build trust, communicate clearly, work as a team, make tough decisions, succeed in both friendly and hostile territory, and--sometimes--cut your losses.Rather than drawing from restrictive blueprints, the book vividly illustrates the value of the intelligence mindset in today’s unpredictable corporate landscape. With insider strategies from one of the world’s smartest intelligence organizations, you’ll be equipped with the intel you need to propel your team to success.

• Language: English
• Publisher: Thomas Nelson
• Release date: Nov 17, 2010
• ISBN: 9780814414491

Book preview

INTRODUCTION

How Much Is Business?

How Much Is Espionage?

by Maryann Karinch

I began this book as a skeptic, unsure that spies could teach business professionals a darned thing that was legal. After a few days of absorbing the stories and other material, I was sure they could, however. One key to seeing the connection was to ask questions that related to the actual jobs and not to the Hollywood versions of spy work. The other key was my keeping in mind that Peter Earnest is no ordinary spy. The breadth of his career experiences and his ability to communicate the lessons derived from those experiences make him a superior resource.

The result is a book offering transferable business practices from the CIA’s National Clandestine Service (NCS) that support employee selection and retention, creative and agile problem solving, mission-focused outcomes, and learning from mistakes. Peter’s experiences in the world of espionage illustrate core business principles. Peter and I also knew of many events from the business world that either implemented or failed to implement those principles. Including case studies from both worlds is one way this book capitalizes on his expertise and mine.

My initial vision of what this book would be was wrong in certain respects and yet, ultimately, right overall. This seeming paradox evolved as my preconceived notions about the intelligence services matured during conversations with Peter. For example, I expected a great deal of regularity: models for action with prescribed shapes and clean edges. Knowing how case officers in the field must handle each covert meeting and action with diligence, I assumed Peter would share codification of practices, formulas to achieve certain outcomes, and patterns and systems that could be replicated to improve the effectiveness of any business professional. There are some structured programs like that in the book, but for the most part the how-to guidance takes a different form.

Instead of blueprints, the recommendations here have the tone and shape of executive coaching. They flow from Peter’s insights about the true success of the intelligence services: the people on the line, why they stay there, and the advantages and functioning of a culture of trust. This is so for a couple of reasons.

First, the people on the line are not just case officers who recruit foreign nationals or technology wizards who will bug the lairs of terrorists abroad. They are everyone in the National Clandestine Service.

Second, the insights on why they stay at the Agency are prescient, as well as reflective of what has worked in the field for decades. In today’s business world, climbing the corporate ladder is becoming a quaint phrase. Many people enter the workforce today viewing career advancement as a route to a purpose-driven career or simply doing what I want to do. The Central Intelligence Agency has known since its inception that it could not lure high-caliber talent with competitive salaries alone. Intelligence officers are government employees with established pay grades. Leisure time and an evening meal with the family may often be hard to come by for case officers, who in many cases do two jobs: the cover job and the covert one.

Third, from hiring processes to communications practices through problem solving in the field, building trust both internally and externally is vital—and doing so is a calculated and achievable action. Loyalty and creative thinking are not random benefits of having good people on board. Companies can foster these attributes in a series of steps.

Having tackled business issues for thirty years as an employee, an entrepreneur, and now a writer, I especially enjoyed this project because I came to understand what kind of relationships, culture, programs, and leadership make it possible for a government agency with high demands to attract and retain so many extraordinary professionals.

Most of the answers to how-to questions came from Peter, but other sources in both the public and private sectors contributed important details as well. Using Peter’s description of the Agency’s successes in the key areas of personnel, operations, strategy, and learning from mistakes, I sometimes reverse-engineered the outcomes. That is, I looked for those areas of success in private companies and found out how they achieved the same results. In addition to getting glimpses of how the Agency conducts its business, therefore, I saw how companies screen employees effectively, channel the talents of their workforce to outsmart the competition, breathe life into a corporate culture, and maintain healthy management practices.

For instance, sometimes the methods used by the National Clandestine Service and by business are similar, if not identical; sometimes they look quite different. But even though NCS officers—I’ll call them spies for convenience, even though the term really applies to the other guys—and business executives may not live similar lives, the methods they use to get their jobs done are rarely worlds apart. So organizations in the for-profit and not-for-profit sectors can implement every bit of business guidance in this book.

As for my paradox, I was wrong about what shape the how-to business information from a spy-turned-businessman would take, but I was right that it would showcase the unique insights of a successful businessman who used to be a spy. That unusual man, Peter Earnest, serves as narrator in this text—he is the I and we on the pages that reference people in the Intelligence Community. For the most part, the stories and counsel here reflect our combined experience and research—but all those stories about silent drills and dead drops … I had nothing to do with them.

SECTION 1

People with Purpose: The Heart of Success

Dedicated people are at the heart of the Intelligence Community. The CIA looks for top-notch candidates who want a mission, not just a job. This section deals with finding, recruiting, screening, and hiring the right people to fulfill that mission. They must be well trained up front and continually trained throughout their careers. They must be committed to the intelligence service, and driven to perform at a high level in a wide variety of circumstances. All of this clearly has applications in the business world as well.

CHAPTER ONE

Where Intelligence Operations and Business Meet

We handed President John F. Kennedy a slim blue folder. It contained the latest intelligence from our top source in Moscow, Soviet military intelligence Colonel Oleg Penkovsky, the weapons and military affairs expert who volunteered to provide his country’s most carefully guarded secrets to the West. Passing the top-secret material to us covertly, using a dead drop under terrible time pressure, he revealed the startling limitations of Soviet missile capabilities. Now, the young president realized that the Soviets could not launch an effective attack on the United States, thus giving President Kennedy the upper hand in facing down Nikita Khrushchev during the Cuban Missile Crisis of 1962.

The mission of the U.S. intelligence services is to make sure intelligence reports going to the president and other policymakers are accurate, timely, and objective. Roughly 200,000 people, with an $80 billion-plus budget, devote themselves primarily to the production of those words. They provide information to enable decision makers to make informed choices. Recruiting agents, developing satellites, and breaking codes are among the myriad collection activities aimed at getting, distilling, and delivering intelligence reports.

No matter how many changes our country has experienced in deciding who is an ally and who is an adversary, the role of intelligence gathering has not changed; America’s interests are paramount. And monitoring and helping to protect those interests has been our constant mission for more than sixty years. In the course of fulfilling that mission, we have brought talent, creativity, and even genius to bear in shaping and refining the business of intelligence.

Intelligence is a high-risk endeavor—a lot can go wrong. The fact that we have achieved so many successes over the years, even in the face of spectacular failures, attests to the commitment and persistence of the extraordinary men and women who have developed the field-tested practices and techniques that have brought about intelligence breakthroughs.

There have been intelligence operations throughout history, but the American services are in many ways the most highly developed intelligence-gathering organizations in the world. And the country’s leadership expects much from our individual intelligence officers in carrying out the challenging requirements assigned to them to serve the country’s intelligence needs.

In deciding whether or not to write this book, I asked myself, What can businesses learn from the intelligence discipline, particularly the methods and practices of clandestine operations? As a former Agency officer and an executive with experience as a successful independent entrepreneur, and now as a senior executive in a profitable business, I saw that the answer was: A great deal. My reflections and observations are not meant to be prescriptive in the sense of, This is how the Agency did it, so you should do it that way, too. Rather, they are more along the lines of, This is what we in the Agency did and how we did it, so take these as tools and techniques that might help you accomplish your own objectives.

THE INTERSECTION OF INTERESTS

The mechanics of espionage may involve disguises, break-ins, and bugs, but the discipline of espionage is primarily about information: acquiring it, processing it, analyzing it, and providing it in clear, understandable language to decision makers. Movies focus on the mechanics because showing people talking and writing reports isn’t nearly as interesting to watch. The information coming out of the field is never perfect, complete, or totally predictive. If it were, then we would be talking about facts and not the discipline of intelligence, which seeks to clarify reality to the extent possible without 100 percent assurance. Intelligence officers have to keep up with the latest requirements of their profession, the best operational practices, and breaking current affairs. They have to be prepared to respond quickly in a crisis, engage in contingency planning, and function under time pressure.

Sound like business executives?

Business executives must observe the competition at trade shows. At crowded restaurants, they must show discretion in conversation. Some are sneaky: They eavesdrop, or learn to read upside down in an attempt to pick up tidbits about a competitor. They also have to know their technology: Anything that collects, transmits, and analyzes data can be valuable to the operation.

Sound like clandestine officers?

They are obviously very much like each other in fundamental ways. If you created a Venn diagram of the primary planning and operational concerns of spies and business executives, it might look like what’s shown in Figure 1-1.

The sections of this book cover these topics of common interest, drawing on my careers in both intelligence and business to highlight the lessons. Specifically, my career in the Central Intelligence Agency (CIA) began when I was recruited by the Agency during the Cold War to serve in the Agency’s Clandestine Service, and then designated the Directorate of Plans and later the Directorate of Operations. I was to spend more than twenty-five years in clandestine operations in Europe and the Middle East, always under one form of cover or another.

Figure 1-1 The intersection of business and CIA interests.

Figure 1-1 The intersection of business and CIA interests.

Later, I would serve in a variety of positions in the Office of the Director of Central Intelligence, the so-called seventh-floor assignments representing the director and the Agency. These included an assignment heading our liaison staff to the U.S. Senate and the Senate oversight committees, another with the Agency’s Inspector General overseeing the Agency itself, and finally, as the director of media relations and spokesman for the Agency under three directors: William H. Webster, the only director to head both the FBI and CIA; Robert Gates, later serving as secretary of defense under both George W. Bush and Barack Obama; and James Woolsey. These diverse assignments at Agency Headquarters and in the field enabled me to see the organization from many different perspectives throughout some of the most exciting and challenging years of the Cold War.

You can apply many of the practices I learned during my career, particularly in the National Clandestine Service (NCS), * to your own operations, whether you are a leader in your company or in a university, government office, law firm, hospital, or church. This is just as I do now, at the International Spy Museum—the first and only public museum in the United States solely dedicated to espionage.

Lots of books use games as metaphors for workplace dynamics—games such as chess, football, and rats chasing moving cheese. You leap back and forth between the two environments as you learn and apply the lessons of the game to your own situation. That approach is not what I have in mind here. Aside from occasional references to the tradecraft of espionage, the stories in this account are aimed at providing you with examples and models from my experience that you may be able to apply to your business life—how to vet, train, organize, plan for contingencies, implement plans, cut losses, take calculated risks, and increase the win ratio. And like business, espionage is more than a game.

Senior analyst Sherman Kent, one of the Central Intelligence Agency’s founding fathers, saw the Agency emerge in the wake of the defunct Office of Strategic Services (OSS) and develop recognized methodology and elaborate and refined techniques. He saw it become similar to other, more mature organizations, but with its own culture, élan, and sense of professionalism. In 1955, he summarized the progress as follows:

Intelligence has become, in our own recent memory, an exacting, highly skilled profession, and an honorable one. Before you can enter this profession, you must prove yourself possessed of native talent, and you must bring to it some fairly rigorous retraining. Our profession like older ones has its own rigid entrance requirements and, like others, offers areas of general competence and areas of very intense specialization. (Kent, 1955, p.1)

Despite the steady progress the Agency has made in the fifty-plus years since Kent’s statement, it is still not a perfect organization—nor will it ever be—but it does have tremendous strengths. It has attracted an extraordinary caliber of people who have not only served the goals of America but have also helped transform the Agency so that it can serve America better. They have done this through creative problem solving and bold initiatives that are consistent with our nation’s values and goals. As you read on, you will see many examples of how highly the Agency values the perspective of the person doing the mission-critical job. Some of the lessons in this book, therefore, are lessons that came from the creative performances and innovative thinking of those top performers in the field—National Clandestine Service officers.

Although I give weight to success stories, I also note some of the Agency’s failures that gave rise to lessons learned, which you may find useful. What we did after botching the dismissal of operations officer Edward Lee Howard, who later sold secrets to the Soviets to get back at the Agency, contains transferable lessons. So does the policy shift we made after issuing a denial of New York Times reporter Stephen Engelberg’s September 1985 story about defector Vitaly Yurchenko’s identifying a few CIA employees as Soviet agents. Engelberg was essentially correct, and the ineffective denial made it clear that the CIA needed a better program for communicating with journalists. It’s interesting to see, particularly in situations such as these, how the Agency applied lessons from well-run businesses. In the case of Howard, we set up an office to deal with employees who have problems. And in the post-Engelberg fiasco, caused by policies reflecting an adversarial relationship with the media, the Agency’s new director, William Webster, departed radically from his predecessor. He brought in a public affairs officer who saw media as allies in speaking truth to power—that power including the American people.

DIFFERENT APPROACHES, COMMON NEEDS

Business and espionage often have dissimilar modus operandi, and the organizations that support them have some underlying differences, as well. Nevertheless, even in those areas where the two may be poles apart operationally and structurally, we can find similar needs.

First, using espionage tradecraft in business sounds sneaky, wrong, and perhaps illegal, and I don’t condone using the techniques and procedures of spying to conduct industrial espionage. But for purposes of discussion in this book, I extend the concept of tradecraft to refer simply to a wide range of skills and techniques applicable to meeting challenges in business that are similar to those in the intelligence world. Think of these maneuvers as inventive ways of solving basic problems. I hope you wouldn’t use a silent drill to install a bug in a rival CEO’s desk drawer, but you could send a couple of staff members (not in their company polo shirts) to drop by a competitor’s trade-show booth and listen to how they pitch to their prospective customers. In reading the stories of espionage in this book, you will sometimes want to focus on how we did something as much as the result we got, but in other cases I introduce more businesslike means of getting the same outcome.

Second, a major area of difference between espionage and business is the CIA’s status as a government agency. We don’t have to make money; our stakeholders—U.S. taxpayers—expect us to fulfill our mandate and to report back to the president and other senior policymakers. We are also accountable to Congress in its oversight role on behalf of the American people. Those bureaucratic advantages and constraints of congressional funding make us distinctly unlike most businesses. At the same time, you can find applicable lessons about allocation of resources and reporting practices, to name just two examples. As former Director of Central Intelligence (DCI) Richard Helms (2003) asserted with deep conviction, The notion that secret intelligence budgets are bound only by the occasional need to break open another crate of money is pure Hollywood. Because some intelligence funds are unvouchered, there is stricter budgetary control in CIA than in any government agency I know, and throughout my tenure I remained tightfisted with the taxpayers’ money.

The third major difference involves putting field officers in parts of the world that are torn by conflict, corruption, and crime. At one end of the spectrum are the inconveniences bred of pervasive corruption, right down to the cop on the corner and the guy who hooks you up to utilities. If you want to get your phone installed in a timely manner, you may have to pay someone off; it’s the kind of diplomacy not taught in school. At the other end of the spectrum, you have the periodic threats to safety and security that accompany anti-Americanism. Some companies have to put employees in harm’s way, too, but exposure to physical danger is not the norm. In most cases, the analogous situation has employees forced to make quick decisions to salvage a deal; the potential harm is financial, rather than physical. Nonetheless, both the spy and the executive need to forge critical decision-making skills and use those skills in high-pressure situations.

INSPIRATION FOR EVERYDAY EXCELLENCE

The Intelligence Community has often led the way in technological advances, so some of the devices that keep people in business connected today were once exclusive to spycraft. We developed reconnaissance satellites to spy on the Soviets, the kind of imaging that’s used in tumor detection today, and the SRAC (Short-Range Agent Communications) device, which is the parent of today’s cell phone. We also built scanners into pens so an agent could run it over a document and copy it; that’s something you can do now, too. We have consistently placed a premium on developing and using technological advances. These technological developments are concrete examples of the many inventions, discoveries, and innovative solutions that intelligence professionals can offer you to upgrade your business practices.

With each of the sections of this book, you will step through processes and best practices that deliver competitive advantages: people who deserve to be known as operations officers, information that becomes intelligence, plans and partnerships that come together in a unified strategy, complementary tactics you can use to construct a campaign, and methods of controlling outcomes.

Keep in mind that the Intelligence Community recognizes that one officer can make an extraordinary difference in the field. So, throughout this book, you will see more focus on the performance of the individual than you do in many other business books. I don’t ignore the importance of teams. I just spotlight the ways that a single person—a person with the spectrum of traits and innate abilities that make him or her extremely desirable as an employee—can help raise the competitive power of an entire organization.

To engender a shared perspective on the issues and practices of the Agency—and me as an operations officer—I thought you should see the vision and mission statements that underlie the operations of officers in